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Question
The Caldwell National Bank has purchased a bond that pays a coupon rate of 10.5%. It is a little concerned because it believes rates will decrease in the future and they will not be able to reinvest the coupon payments at the same rate. What type of risk are they concerned about?
A. Credit risk
B. Reinvestment risk
C. Business risk
D. Call risk
E. Prepayment risk
Answer
This answer is hidden. It contains 1 characters.
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